A NEW Brexit plan which is reported to be backed by members of both the Remain and Leave camps of the Conservative party has been put forward by MP for North West Hampshire Kit Malthouse.

The plan - called the The Malthouse Compromise after Mr Malthouse who brought the parties together - would lead to Britain leaving the EU "on time and with a functioning government", former Brexit minster Steve Baker said.

The plan "provides for exit from the EU on time with a new backstop, which would be acceptable indefinitely, but which incentivises us all to reach a new future relationship".

It would extend the transition period - the period where the UK would continue to follow EU rules and pay into its budget - from the end of 2020 and into December 2021 which would "allow both parties to prepare properly for World Trade Organisation terms, but also provide a period in which the parties could obviate this outcome by negotiating a mutually beneficial future relationship".

Former Cabinet minister Nicky Morgan has confirmed talks have been taking place for "some days" between MPs from the Remain and Leave wings of the Tory Party, co-ordinated by MP Malthouse, to find a compromise way forward.

The discussions involved herself, health minister Stephen Hammond, and solicitor general Robert Buckland from one wing of the party, and Jacob Rees-Mogg and Steve Baker from the Brexiteer side.

She said their plan involved a "recasting" of the Northern Ireland backstop as "free trade agreement-lite" with a commitment on all sides there should be no hard border on the island of Ireland and an extended transition period to December 2021.

"The prime minister has been aware of the discussions. At some point there has to be compromise on all sides in order to get a deal over the line. That is what most of us want to see - a negotiated settlement with the EU," Ms Morgan told the BBC Radio 4 Today programme.

"People like me want to avoid a no-deal outcome, a crashing out on March 29. We have to look for ways to do that. We are all prepared to compromise on that."

James Heappey, MP for Wells, said on Twitter: "Heard about this yesterday & think there's real merit in proposals.

"Response of colleagues tonight shows that this has support from across the Brexit spectrum so could be the way forward. I hope Govt gives it the consideration it deserves."

However, international trade secretary Liam Fox said support for another amendment, Sir Graham Brady's amendment, would enable Theresa May to return to Brussels with a "strong mandate" to seek changes to the Northern Ireland backstop.

He said the prime minister was prepared, if necessary, to reopen the Withdrawal Agreement in order to secure a legally-binding text.

"I think we should send the prime minister back to Brussels with a strong mandate to be able to say 'If you compromise with us on this one issue, on the the backstop, we would be able to a get an agreement' - an agreement that is almost there," he told BBC Radio 4's Today programme.

Mr Fox said he believed attitudes on the EU side towards a new compromise were changing.

"We have seen the German economy weakening, we have seen the French economy weakening," he said.

"I think this view - 'We can simply weather out any disturbance that would occur from a no-deal' - I think there is much less appetite for that. I think we still have time to reach a compromise on that."

Mr Fox reacted coolly to the prospect of a compromise agreement by the Leave and Remain wings of the Tory Party in talks co-ordinated by Mr Malthouse.

"There are all sorts of ideas being put out, but Parliament cannot take a decision unless it is on the order paper, and it is not on the order paper," he told the Today programme.

"We have had a long time to get to today. It is time that we actually made progress. It is getting close to March 29. Voters want Parliament to make a decision."